Question
A company is considering replacing an old piece of machinery, which cost $602,600 and has $351,900 of accumulated depreciation to date, with a new machine
A company is considering replacing an old piece of machinery, which cost $602,600 and has $351,900 of accumulated depreciation to date, with a new machine that has a purchase price of $486,400. The old machine could be sold for $64,900. The annual variable production costs associated with the old machine are estimated to be $159,000 per year for eight years. The annual variable production costs for the new machine are estimated to be $101,700 per year for eight years. a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss
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